By Allan Barber
Alliance Group announced this afternoon its intention to close its sheep and lamb processing operations at its Mataura plant and transfer them to its main Southland lamb plant at Lorneville.
Mataura’s beef facility which has recently had a $15 million upgrade will continue to process beef with its remaining staff count of more than 400.
This decision is still up for final consultation with the workforce and union, but as always this is a formality inasmuch as the decision has already been made. However the media release indicates that other options could emerge during the consultation process.
If the proposal remains unchanged, approximately 260 workers will be offered the chance to transfer to Lorneville with a further 65 engineering, administration and management staff also affected.
In a media release Alliance’s Chief Executive Grant Cuff refers to the company’s status as one of Southland’s largest employers, emphasising its duty as a cooperative to its shareholders to operate the plant configuration most appropriate to the available stock numbers.
Significant efforts had been made to retain complementary sheep, lamb and beef processing at Mataura, but declining stock numbers have made this unsustainable.
Cuff refers to the strength of Alliance’s balance sheet which will enable it to withstand the challenge of a difficult period for the industry as a whole.
He also says “We are confident in the long-term outlook and these changes are essential to allow the company and its 5,000 farmer shareholders to benefit from the demand for New Zealand meat products in the global market.”
Today’s announcement confirms the rumours of industry rationalisation that have been circulating in recent days.
The fact that Alliance has made the first move does not mean there won’t be further changes in due course affecting either the South Island’s other large cooperative Silver Fern Farms or ANZCO’s Canterbury Meat Packers operation near Ashburton.
However Alliance’s move will provide a small breathing space before further capacity or structural changes are necessary.
Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he runs a boutique B&B with his wife. You can contact him by email at email@example.com or read his blog here »